What Price Air?

Australian bureaucrats thought they had struck it rich last April when they auctioned off rights to use the airwaves for a satellite-TV service. An investment group called Ucom Proprietary Ltd. submitted a sealed bid for $152 million, far above government projections. The problem was that Ucom had no intention of spending that much. It deliberately defaulted on its winning bid, forcing the government to turn to the next lower bid--which was also Ucom's. The company proceeded to default on one bid after another before finally sticking with one that was just slightly higher than the bid of its closest rival, which by then had leaked out. Ucom walked off with the license for $84 million--setting off an uproar that nearly cost Australia's communications minister his job.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.